This paper argues that in light of the perverse incentives generated by the current system (which leaves many people choosing between income and health), wide-ranging changes are needed to the welfare system. Building on earlier work (Nattrass, 2006), the paper argues that there is growing evidence that current disability policy is creating incentives for people to become and/or remain ill – and that this could be exacerbating the Aids epidemic and undermining the antiretroviral treatment rollout.